Russia petroleum enterprises require prolonging pipe-supply-agreement with Ukraine

Nov. 4 MetalBiz--Russia's five large-scale petroleum and natural gas enterprises recently jointly wrote the letter that they request the government to prolong the agreement importing the tax-free pipe products of oil pipeline from Ukraine.

In 2005, Russia and Ukraine signed the agreement importing the tax-free pipe from Ukraine, and this agreement will expire by December 31, 2009. These five petroleum and natural gas enterprises stated that after the deadline, Russia pipe market may post Russia's enterprises monopolizing the price, however, the price monopoly will directly have an impact on the Russia's strategic enterprises' operation and drag the federal budget.

It is reported that from the beginning of 2006 to September 2008, pipe price in the international market straight jumped, up by 77.5%. After the global financial crisis, the pipe demand started to slide, and the price also followed to tumble by 19.5%. Ukraine exported pipe products to Russia at the price of 420,000 rupees, holding some competition in the Russia market.

The report said that in January 2009, Russia domestic pipe enterprises required the government to adjust up pipe import deputy regarding the influence of crisis as the excuse. Even so, Russia domestic pipe enterprises have not the competition in price, because the price of raw material also rose.